NATIONAL POWER CORPORATION, PETITIONER, VS. THE INTERMEDIATE APPELLATE COURT, ALI DIMAL MARRIED TO MACABANDO DIMAL, RESPONDENTS.

National Power Corporation versus Dimal

The Case

This is a petition for review brought by the National Power Corporation against Ali Dimal, married to Macabando Dimal, and the Intermediate Appellate Court. The dispute concerns the amount of just compensation for a portion of registered land in Guimba, Marawi City, Lanao del Sur, that was inundated by one of the Corporation's projects, the Agus Hydroelectric Plant. The Corporation itself initiated expropriation proceedings, and the question that reaches the Supreme Court is narrow but instructive: which valuation should govern just compensation, the lower figure fixed by the City Assessor in his assessment, or the higher rate recommended by the commissioners and adopted by the trial court. The case matters because it shows how the Court treats the assessor's valuation when the assessor himself, sitting as a commissioner, abandons it in favor of the true market value of the land.

Procedural History

The National Power Corporation filed expropriation proceedings before the Regional Trial Court. The trial court appointed commissioners to ascertain the just compensation of the land. After hearing the commissioners' report, the trial court fixed just compensation at the rate recommended by the commissioners, namely twelve pesos per square meter.

The Corporation appealed to the Intermediate Appellate Court, which affirmed the judgment of the trial court. The Corporation then came to the Supreme Court by petition for review, assailing the appellate decision on the ground that the twelve pesos rate was excessive and that the rate of three pesos per square meter, fixed by the City Assessor of Marawi City as the fair market value of the property, should be the just compensation contemplated by the law, more specifically Presidential Decree Number 76 as amended. The Supreme Court gave due course to the petition, and after the parties filed their respective memoranda, proceeded to decide the case in favor of the private respondents.

Facts

The private respondents owned a registered parcel of land located at Guimba, Marawi City, Lanao del Sur, with an area of 46,431 square meters. Their title was a Torrens Title granted by virtue of a patent from the Government. One of the projects of the National Power Corporation, the Agus Hydroelectric Plant, caused the inundation of some 18,552 square meters of that land.

The inundation rendered the submerged portion virtually useless for the purposes of the owners. The owners accordingly asked the Corporation for damages. To simplify matters, the Corporation decided to file expropriation proceedings instead.

Before the trial court, commissioners were appointed to ascertain the just compensation of the land. The commissioners recommended twelve pesos per square meter, and the trial court fixed compensation at that rate. The City Assessor of Marawi City, who had earlier assessed the fair market value of the property at three pesos per square meter, was himself a member of the board of commissioners tasked with fixing just compensation, and he agreed to the twelve pesos rate. On appeal, the Intermediate Appellate Court affirmed the trial court. The Corporation elevated the matter to the Supreme Court, insisting on the three pesos rate.

Issues

• Whether or not the rate of twelve pesos per square meter fixed by the trial court and affirmed by the Intermediate Appellate Court is excessive and should be reduced to the three pesos per square meter assessed by the City Assessor of Marawi City.
• Whether or not the three pesos per square meter assessment of the City Assessor constitutes the just compensation contemplated by law, more specifically Presidential Decree Number 76 as amended.

Applicable Provisions

The decision refers to Presidential Decree Number 76, as amended, as the law governing just compensation in expropriation, but it does not quote any text of that decree. The Court instead applies the constitutional and statutory standard of just compensation by measuring it against the true market value of the land, and it treats the assessor's valuation as evidence that may be superseded when the assessor himself, sitting as a commissioner, agrees to a higher figure.

Ruling

On the first issue, the Court ruled that to pay only three pesos per square meter is unjust and inequitable, considering the true market value of the land. The twelve pesos rate was not excessive. The Court stressed that even the City Assessor himself, as a member of the board of commissioners tasked with the duty of fixing just compensation, agreed on the twelve pesos rate. That agreement, in effect, amended his previous assessment of three pesos per square meter.

On the second issue, the Court rejected the argument that the assessor's three pesos assessment should be the just compensation contemplated by Presidential Decree Number 76 as amended. The assessor's own conduct as commissioner showed that the assessment did not reflect the true market value. The Court therefore affirmed the assailed decision.

Doctrine

Just compensation is measured by the true market value of the property taken, not by the assessor's valuation alone. When the assessor himself sits as a commissioner in the expropriation proceedings and agrees to a higher rate, that agreement effectively amends his previous assessment, and the higher rate recommended by the commissioners and adopted by the trial court will be sustained. A rate that is unjust and inequitable in light of the true market value cannot stand merely because it appears in the tax assessment.

Disposition

The Supreme Court affirmed the decision of the Intermediate Appellate Court, holding that the twelve pesos per square meter rate was the proper just compensation, with no costs.

Remember This

The single line worth memorizing is that the assessor's valuation is not conclusive of just compensation, especially when the assessor himself, as commissioner, agrees to a higher rate that effectively amends his own assessment. Examiners like to use this case to test whether a candidate will mechanically adopt the tax assessment or will instead look to the true market value of the land taken.